I spent time handling Ratan Tata's demands: Mistry

As chairman of Tata Sons, Cyrus Mistry says over time his role revolved around handling the “demands and views“ of Ratan Tata on a “full time basis“ rather than running the $108-billion Tata conglomerate.Reeba Zachariah | TNN | January 03, 2017, 08:45 IST

Mumbai: As chairman of Tata Sons, Cyrus Mistry says over time his role revolved around handling the “demands and views“ of Ratan Tata on a “full time basis“ rather than running the $108-billion Tata conglomerate.

Mistry, in a reply to the National Company Law Tribunal (NCLT), presented copies of emails, minutes of board meetings and other documents as evidence to back allegations about interference by Ratan Tata and other Tata Trusts members, especially Noshir Soonawala and R Venkataramanan, in the running of the Tata Group. Tata Trusts holds 66% in the group's parent company.

Mistry's affidavit came after NCLT, a quasi-judicial body, told him to show proof of charges levied against Ratan Tata and others by his family-owned firms through a petition in the tribunal. Mistry's family-owned firms, which hold a little over 18% in Tata Sons, had cited mismanagement and oppression of minority shareholders to seek supercession of the company board.

Mistry's affidavit says the email exchanges between him and Ratan Tata were as high as “555“ in number, demonstrating the “incessant interference“ from Ratan Tata during Mistry's tenure, which ended with his ouster as chairman on October 24, 2016.

Mistry cited several instances when some Tata trustees allegedly interfered with operations of listed Tata Group companies. Such interference was seen in Tata Motors' fund-raising plans and Tata Power's acquisition of Welspun's renewable energy business, he said. Mistry also said Ratan Tata had pushed for higher sales of the loss-making Nano cars to Ola instead of Uber as he had a personal investment in Ola. Mistry said Soonawala often interfered in crucial board decisions but tried to put across such interference as being done in his “personal capacity“ and almost always discouraged a written reply from Mistry.

The former Tata Sons chairman said it was not only him, but even other senior officials of various group companies had to respond to “queries and interventions“ from Ratan Tata. “While this was disruptive and intrusive, with (Ratan Tata) refusing to truly retire“, Ratan Tata would “also directly engage with employees and executives of various companies in the Tata Group undermining the authority of not just the executive chairman of the Tata Group but also the board of directors of (Tata Sons) and indeed the boards of directors of various Tata Group companies“.

Mistry's office declined to comment, when contacted by TOI. Mistry filed his reply with NCLT on December 29.

Mistry said such interference created “an environment of ambiguity“ and “a tyrannical breakdown“ of corporate governance rules. Mistry's affidavit stated that “what began with suggestions in 2013 gave way to assertion of rights under the Articles of Association (AoA) and eventually demands for information on anything and everything that Ratan Tata and Soonawala thought fit to ask“.

The AoA that Mistry refers to were changed after he was appointed Tata Sons chairman in 2012. It empowered a majority of Tata Trusts-nominated directors to veto any decision that Tata Sons board would want to take.

“To save the environment and to fight climate change, my government has planned a major campaign. By 2022, we want to generate 175 GW of renewable energy. In the last three years, we have already achieved 60 GW or around one-third of this target,” he said.